The grand total captured by petrocrats and fossil fuel companies since 1970 is $52 trillion, providing the power to “buy every politician, every system” and delay action on the climate crisis, says Professor Aviel Verbruggen, the author of the analysis. Huge profits were inflated by country cartels that artificially limited supply. The analysis, based on data from the World Bank, assesses the “rent” secured by global oil and gas sales, which is the economic term for the unearned profit generated after deducting the total cost of production. The study has not yet been published in an academic journal, but three experts at University College London, the London School of Economics and thinktank Carbon Tracker confirmed the analysis as accurate, with one calling the total an “unbelievable number”. It appears to be the first long-term estimate of total industry earnings, with oil rents providing 86% of the total. Chart Emissions from the burning of fossil fuels have caused the climate crisis and contributed to the worsening of extreme weather events, including the current heatwaves affecting the UK and many other countries in the northern hemisphere. Oil companies have known for decades that carbon emissions are dangerously warming the planet. “I was really surprised by such high numbers – they are huge,” said Verbruggen, an energy and environmental economist at the University of Antwerp, Belgium, and former lead author of an Intergovernmental Panel on Climate Change report. “It’s a huge amount of money,” he said. “You can buy any politician, any system with all that money, and I think that’s what happened. Protects [producers] from political interventions that may limit their activities”. Rents collected from the exploitation of natural resources are unearned, Verbruggen said: “It’s real, pure profit. They grabbed 1% of all the wealth in the world without doing anything about it.” The average annual profit from 1970-2020 was $1 trillion, but he said he expected that to double in 2022. Subscribe to First Edition, our free daily newsletter – every morning at 7am. BST Profit grabbing is blocking the world’s action on the climate emergency, he said: “It’s really taking money away from alternatives. In every country, people struggle so much to pay their gas and electricity and oil bills [petrol] bill, that we don’t have any money left over to invest in renewable energy sources.” Some of the rents go to governments as royalties, says Professor Paul Ekins, of University College London: “But the fact remains that, over the last 50 years, companies have made an enormous amount of money producing fossil fuels, the burning of which is the main cause of climate change. This is already causing untold misery around the world and is a major threat to future human civilization. “At the very least these companies should invest a much larger share of their profits in the transition to low-carbon energy than is currently the case. Until they do, their claims to be part of the low-carbon energy transition are among the most blatant examples of greenwashing.” Mark Campanale, at Carbon Tracker, said: “Not only is the scale of these rents impressive, but it is important to note that, in the midst of a cost-of-living crisis caused by record oil and gas prices, this flow Money in a relatively small number of petro and energy companies is set to double this year. Shifting to a carbon neutral energy system based on renewable energy sources is the only way to end this madness.” The Guardian revealed in May that the world’s biggest fossil fuel companies are planning a raft of “carbon bomb” oil and gas projects that will push the climate beyond internationally agreed temperature limits with devastating global consequences. The fossil fuel industry also benefits from $16 billion a day in subsidies, according to the International Monetary Fund. Verbruggen’s analysis used the World Bank’s oil rent and gas rent data, which the bank aggregates by country and is expressed as a percentage of global GDP. He then multiplied this by the World Bank’s global GDP data and adjusted for inflation to put all figures in 2020 US dollars. Verbruggen said oil-rich nations such as Russia and those in the OPEC cartel, including Saudi Arabia, kept rents high by limiting supply: “They are changing the fundamentals of the markets.” Military action, such as the US-led invasion of Iraq in 2003, and political action, such as the embargo on Iranian oil exports, had also driven up rents, he said. If all available oil and natural gas could be freely marketed, the price of conventional oil would be $20-$30 a barrel, Verbruggen said, compared to about $100 today. There is far more oil, gas and coal in existing reserves than can be burned if the world is to limit global warming to 1.5C, the goal agreed by nations in the 2015 Paris climate accord. Campanale said: “To be kept at 1.5C, that’s what it means [international oil companies alone] forgo about $100 trillion in potential revenue. You can see why the oil oligarchs and nations controlled by political elites want to keep the fossil fuel rents, the source of their power.” May Boeve, head of campaign group 350.org, said: “These gains have enabled the fossil fuel industry to fight all attempts to change our energy systems. We must dismantle such rental systems and build our future based on accessible and distributed renewable energy that is more sustainable and democratic in every way.”
